South Korean stablecoin bill delayed Again, Here’s why

Key Takeaways

• South Korea’s Digital Asset Basic Act, which aims to regulate stablecoin issuance, has been delayed until 2026 due to ongoing regulatory disputes. 

• The primary deadlock is between the FSC, which favors innovation and broader issuers, and the BOK.

• The bill requires 100% reserves in safe assets, such as bank deposits, with delays risking slower crypto growth amid foreign stablecoin dominance.

South Korea’s much-awaited stablecoin regulations have been postponed, again.

The Digital Asset Basic Act, also referred to as Phase 2 of the Virtual Asset Act or the comprehensive digital asset framework, has been delayed until 2026. 

This bill aims to establish rules for stablecoin issuance, including licensing, reserve management, and investor protections, building on the existing Virtual Asset User Protection Act enacted in 2023-2024, with a focus on unfair trading and user safeguards.

According to local reports, the primary cause is an ongoing deadlock between regulators, particularly the Financial Services Commission (FSC) and the Bank of Korea (BOK).

While the FSC, which oversees financial regulation, prefers a more flexible approach to encourage innovation, the central bank prioritizes financial stability and stricter controls.

At the center of the dispute is the BOK’s insistence that stablecoin issuers operate as consortia in which banks hold at least 51% ownership, citing banks’ experience with supervision and anti-money-laundering controls.

Tensions escalated further after the BOK suggested forming a dedicated licensing committee or consultation body with veto power over stablecoin approvals.

Regulators at the FSC rejected the idea, saying existing coordination mechanisms involving the FSC, BOK, and Ministry of Economy and Finance already provide sufficient oversight.

Beyond governance structure, disagreements extend to reserve requirements, enforcement authority, supervisory jurisdiction, and whether interest-bearing stablecoins should be permitted at all.

South Korea has been working on comprehensive crypto regulations, and initiatives have been boosted with the election of President Lee Jae-myung, who prioritized developing Korean won-backed stablecoins to protect monetary sovereignty amid the dominance of U.S. dollar stablecoins.

The proposed bill requires issuers to hold 100% reserves in safe assets, such as bank deposits or government bonds, with full custody by banks.

It guarantees user redemptions to prevent bankruptcy spillovers.

Despite delays, private sector activity continues to progress, with major banks exploring consortia for won-pegged stablecoins, targeting 2026 launches.